As the Enterprise and Regulatory Reform Bill reaches its final stages before passing into law, amendments have been put forward which, if approved by Parliament, will make significant changes to our whistleblowing legislation.

Background

The Jimmy Saville, Hillsborough and Mid Staffs scandals could all be seen as cases where less damage would have been done if people had spoken out earlier. Although the reasons for these cover-ups are varied and complex, they have rightly exposed the current protection for whistleblowers to closer scrutiny. Calls for better protection have intensified since Gary Walker broke cover in the middle of February to claim that he had been gagged by a NHS Trust following his dismissal as chief executive.

Against this there has been a perception in some quarters that the whistleblowing legislation has been abused by some workers who have used it to extract additional compensation from the employers, where the disclosures they made had more to do with personal dissatisfaction with their working environment than matters of public interest which should merit special protection.

Changes to the legislation have been introduced piecemeal as the Enterprise and Regulatory Reform Bill works its way through Parliament, with a final group of amendments being introduced as recently as 26 February. Overall, they aim to increase protection for “genuine” whistleblowers, while plugging a loophole that conferred protection on employees who were in effect complaining about their own personal employment position rather than matters in the public interest.

Importing a public interest test

Protection for whistleblowers was first introduced by the Public Interest Disclosure Act 1998. Despite its title, this Act does not explicitly require disclosures by workers to be in the public interest to qualify for protection. Rather, the Act confers protection depending on the type of information revealed: for example the commission of criminal offences, danger to life or damage to the environment. While a number of the listed categories will clearly involve matters of public interest, there is one particular category – the failure to comply with legal obligations – that has been interpreted more widely. Over ten years ago the case of Parkins v Sodexho established that breaches of a contract of employment by an employer could count as a failure to comply with legal obligations for these purposes. That meant that a much wider range of disclosures were protected that had been originally thought when the Act was first passed.

The Government has now acted to reverse the effect of Parkins v Sodexho by adding an explicit requirement that all disclosures must be in the public interest as well as falling into one of the categories listed in the Act. What is in the public interest has not been defined.

Removing the good faith requirement

Under the existing law, most disclosures also need to satisfy a “good faith” requirement in order to qualify for protection. In recent years this has led to some cases that would otherwise qualify for protection being thrown out because a tribunal decided that the worker was acting out of spite or revenge.

Given that there will now be an express requirement for the disclosure to be in the public interest, the Government has concluded that the good faith requirement can be removed. However, a new provision has been inserted that allows a tribunal to reduce compensation by up to 25per cent where it finds that the employee has not acted in good faith.

Imposing vicarious liability

At present whistleblowers are only protected from actions by their employer. Unlike our discrimination legislation, there is no explicit protection if they are victimised by their co-workers. Additionally, there is no provision which makes an employer vicariously liable in these circumstances.

Amendments have now been put forward that replicate the protection currently available to workers from unlawful discrimination. These new provisions will impose personal liability on co-workers and other agents of an employer if they subject a worker to any kind of detriment on the ground that he or she has made a protected disclosure. In addition, employers will be vicariously liable for these actions, subject to a defence if they have taken “all reasonable steps” to prevent their workers from acting in this way.

These measures will close the loophole highlighted by the recent case of NHS Manchester v Fecitt, where the Court of Appeal concluded that an employee was not entitled to a remedy against her employer under the whistleblowing legislation after she had been cold-shouldered and bullied by co-workers because of a protected disclosure she had made.

Definition of worker

Case law has made it clear the definition of worker is wide enough to cover former as well as present employees, but applicants for jobs are not protected, as they are under our discrimination law. The Government has introduced a provision into the Bill which will give it power to widen the definition of worker by secondary legislation should it decide that this is necessary.